Essar to invest Rs 4,500 crore in 300 MW renewable energy project with NHPC

Essar Power will invest around Rs 4,500 crore in a 300 MW renewable energy project in Andhra Pradesh, as the group looks to expand its presence in the clean energy business while retaining conventional power generation as part of its broader energy strategy. Essar Renewables Limited (ERL), the renewable energy arm of Essar Power, has signed a power purchase agreement (PPA) with state-run NHPC Limited for the firm and dispatchable renewable energy (FDRE) project. The project will combine solar and wind power generation with battery energy storage systems (BESS) to supply reliable and dispatchable electricity.

The investment is part of Essar Power's ambition to build an energy portfolio of around 5 GW spanning renewable, thermal and gas-based power generation. "At Essar Renewables, we are focused on building a strong portfolio across solar, wind and Battery Energy Storage Systems, tapping into the growing opportunities in India's renewable energy sector," Ankur Kumar, CEO of Essar Power, said. "The 300 MW FDRE project with NHPC is an important milestone in this journey, strengthening our portfolio and advancing our ambition to build a scalable renewable energy business," he added. The project comes at a time when India's power sector is grappling with the challenge of meeting rising electricity demand while ensuring round-the-clock power supply from renewable sources.

Unlike conventional solar and wind projects, FDRE projects integrate multiple generation sources and storage to provide electricity according to contracted supply schedules, addressing the intermittency associated with renewable energy. Battery storage is increasingly becoming a critical component of India's energy transition as the share of renewable power in the electricity mix rises. Such projects also help utilities manage fluctuations in generation and demand. Essar Group's infrastructure operating partner Srinivasan Vaidyanathan said building a reliable and sustainable energy ecosystem would be critical to supporting India's development ambitions.

"Essar's experience in the energy sector, combined with our focus on new technologies and emerging opportunities, gives us a strong foundation to participate in this next phase of India's energy growth," he said. NHPC, a Navratna public sector enterprise under the Ministry of Power, has traditionally focused on hydropower but has expanded into solar and wind energy in recent years. Essar Power's proposed 5 GW portfolio reflects a strategy of combining investments in renewable energy and emerging clean energy technologies with conventional generation capacity. The company is positioning itself to participate in India's growing electricity market while diversifying its generation mix.

India has set a target of achieving 500 GW of non-fossil fuel-based installed electricity capacity by 2030, requiring substantial investments in renewable generation, storage and transmission infrastructure.